California buyer of Crop Genetics moving to Howard TWO FOR MARYLAND

January 27, 1995|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

Drawn by state incentives and the quality of life in Howard County, a California biotechnology company yesterday announced that it would move its headquarters to Maryland after it completes the acquisition of Columbia-based Crop Genetics International Corp.

But the move, to be completed by the fall, will involve an undetermined number of layoffs at Crop Genetics' Columbia location, which has 60 workers, as well as at Biosys Inc.'s 40-person Palo Alto operations, which will be closed.

The number of workers in Columbia will increase, Biosys said, but some of the jobs will be filled by transferred Californians.

Biosys President and Chief Operating Officer Edwin C. Quattlebaum said Maryland's efforts at creating a good business climate for his type of company are paying off.

"We believe Maryland has worked very hard to become one of the top centers for biotechnology," Mr. Quattlebaum said.

Mr. Quattlebaum said no specific staffing level in Columbia has been determined. The move will not affect Biosys' manufacturing operations in Decatur, Ill., which has 15 workers, and in Cardiff, Wales, which has 35 workers.

The two companies, which develop and sell pesticides and herbicides that use biological agents rather than man-made chemicals, announced they were merging in December in a stock swap deal valued at $11.4 million.

It is expected to be completed by mid-March after approval by the Securities and Exchange Commission and both groups of stockholders.

Last month's merger announcement had raised concerns in Maryland that Crop Genetics would follow the path taken by two other Maryland high-tech companies acquired by California corporations.

MicroProse Inc., a Hunt Valley computer and video game maker, had its headquarters moved to Alameda, Calif., after it was bought by Spectrum HoloByte Inc. in 1993.

One shutdown, one spinoff

Similarly, most of the local operations of Nova Pharmaceutical Corp. of Baltimore have been shut down since its 1992 purchase by Scios Inc. of Mountain View, Calif. However, the merged Scios Nova Inc. spun off Baltimore-based Guilford Pharmaceuticals Inc.

But Biosys found the Columbia location of Crop Genetics more appealing than its Northern California birthplace. Not only will the cost of living be cheaper, but the new location also will be closer to the company's markets, factories and regulators, Mr. Quattlebaum said. And the good reputation of Howard County schools will be a plus in attracting new employees, he said.

"We think it's a good place to live," Mr. Quattlebaum said at a news conference at Crop Genetics' 75,500-square-foot facility.

Another lure was state incentives, the biggest being a $3.4 million loan guaranty granted to Crop Genetics Dec. 7 -- two days before the merger was announced. The company also is talking with the state about financial assistance for relocation and training.

"Crop Genetics is very important to us," said James D. Fielder, acting secretary of the Department of Economic and Employment Development.

Change in tax plan

Howard County also is accommodating the company by moving up consideration by the county council of a personal property tax credit for research equipment.

"We decided the time was now," said Richard W. Story, executive director of the county's economic development authority.

The move also will cut costs for the combined operation, pushing it closer to a goal that has eluded Biosys since it was founded in 1983 -- profitability. "It's our No. 1 goal, and the combined operations have a better chance," said Bruce G. Fielding Jr., senior vice president and chief financial officer.

Biosys lost $3.0 million in its latest fiscal quarter, up from $2.5 million in the previous year's quarter. Sales were $3.3 million, up from $2.3 million.

Crop Genetics also has yet to make a profit in its 13-year history. Most recently, it reported a $1.3 million quarterly loss, on revenue of $1.9 million.

Mr. Quattlebaum said of moving into the black: "It has to be sooner rather than later."